Reserve Bank of India Governor Shantikanta Das stated on Friday that cryptocurrencies pose serious threats to monetary and financial stability, claiming that they might lead to a scenario in which the central bank loses control over the money supply in the economy.
In fact, I believe that this is something that shouldn’t be let to control the financial system. Due to its significant hazards to monetary and financial stability, it also presents threats to the banking system. During his speech at the Peterson Institute for International Economics, a think tank, RBI Governor Shantikanta Das stated that it might also lead to a situation in which the central bank loses control over the money supply in the economy.
How does the central bank monitor the amount of liquidity in the system if it loses control over the money supply in the economy? How can a central bank reduce the money supply or eliminate it during a crisis to control inflation? In response to a query, he stated, “We see cryptocurrency as a big risk, and there has to be an international understanding because the transactions are cross-country.”
Given the extreme hazards connected to cryptocurrencies, there must be (an) worldwide understanding on this matter. I do not believe that it is something that ought to be promoted. Although not many people share this opinion, I believe it is crucial for maintaining financial stability.
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